7 CCI plants to be sold
Sale to fetch Rs 617.76 crore
New Delhi, September 4Seven of the 10 plants of state-owned Cement Corporation of India — for which players like Grasim and Dalmia have shown interest — will be sold.
The proposal of the CCI and the Department of Heavy Industry to sell the seven plants to raise funds for restructuring the company has received the nod of Board for Reconstruction of Public Enterprises.

Rs 8,017-cr revival package for IISCODurgapur, September 4Union Minister of Steel Ramvilas Paswan has announced a Rs 8,017-crore revival package for IISCO, which will be completed by 2012 and benefit more than 16,000 workers.

PSEB
decision shocks furnace unitsLudhiana, September 4The PSEB decision to shut down arc
and furnace units in the wake of the ongoing power crisis has sent shock
waves in almost 10,000 industrial units.

Models showcase a new range of jewellery at the International Gem and Jewellery Exhibition in Mumbai on Saturday evening. — PTI

Alcohol to
power computerSan Francisco (USA), September
4A California-based company has
produced a portable fuel cell, which requires just half-a-litre of
alcohol per day, to power a laptop computer. The cell, produced by
UltraCell, delivers 45 watts of power.

ITC mulls
two 7-star hotelsNew Delhi, September 4ITC is contemplating to open two
“super luxury” hotels, one each in Chennai and Bangalore.

No to Taj
catering bid for ‘Palace on Wheels’Jaipur, September 4The Rajasthan Tourism Development
Corporation, which has been in the eye of a storm over its
decision to outsource some services of the prestigious Palace on Wheels
from the Taj Group, has dropped the idea, a senior official said today.

Deduction
admissible to handicapped personsQ. I am 60 per cent
handicapped and my annual income is Rs 1,28,219 and my GPF amount is
Rs 7,210 and my LIC is Rs 12,588. Please give me my complete tax
information and also tell me that according to u/s 80U, can I get a
rebate of Rs 50,000 as I am 60 per cent handicapped.

New Delhi, September 4
Seven of the 10 plants of state-owned Cement Corporation of India — for which players like Grasim and Dalmia have shown interest — will be sold.

The proposal of the CCI and the Department of Heavy Industry to sell the seven plants to raise funds for restructuring the company has received the nod of Board for Reconstruction of Public Enterprises (BRPE).

The seven plants, which are not operating, will fetch Rs 617.76 crore.

“For the biggest plant of CCI at Nayagaon in Madhya Pradesh having a capacity of 1.4 million tonnes the A.V. Birla Group company, Grasim, has shown interest,” sources said.

The Dalmias have shown interest in taking over the Adilabad plant in Andhra Pradesh which has the capacity of four lakh tonnes, sources added.

The expression of interest has also come for the plants at Akaltara and Mandhar in Chattisgarh, Kurkunta (Karnataka), Charkhi Dadri (Haryana) and a grinding unit in Delhi.

After the nod of the BRPE, the proposal will go to the Cabinet for approval.

Of the 10 plants of the CCI, only three were working and all of them were making operating profit.

The BRPE has also approved the closure of Bharat Opthalmic Glass.

The board was deeply divided on the issue of sale of seven plants of the CCI and the closure of Bharat Opthalmic Glass.

The cost of closure of Bharat Opthalmic Glass will come to Rs 350 crore.

The proposal to close down Bharat Opthalmic Glass was debated at a meeting of BRPE with members clearly divided on the issue. The revival proposal for the company needed just Rs 68 crore, of which Rs 65 crore would have been required for renewing the plant and machinery.

According to the operating agency appointed by the Board for Industrial and Financial Reconstruction (BIFR), if the fresh funds were infused the company would have started making profit from the first year.

The board, however, decided to go with the administrative ministry’s proposal to close down the company.

With the closure the government will have to forego around Rs 300 crore in loans and accumulated interest. The voluntary retirement scheme would require another Rs 8 crore. Payment of other dues would take the total cost of closure to Rs 350
crore. — PTI

Durgapur, September 4
Union Minister of Steel Ramvilas Paswan has announced a Rs 8,017-crore revival package for IISCO, which will be completed by 2012 and benefit more than 16,000 workers.

Speaking to newspersons at the Burnpur Club, Mr Paswan said: “The entire project will be completed within seven years.”

The minister said: “SAIL would invest Rs 5,017 crore for the modernisation of the IISCO plant, and Rs 2,000 crore for the upgradation of its collieries at Ramnagar, Jitpur and Chasnala. The remaining Rs 1,000 crore will be invested for the development of its iron ore mines at Gua, Chinia and Monoharpur.”

“SAIL has already invested Rs 25,000 crore for the modernisation of its other plants. By 2012, we would invest Rs 1 lakh crore, by which the
production will be upgraded from 35 million tonnes of steel to 65 million tonnes. Within 2020, for the betterment of SAIL steel plants, SAIL out of its own resources would invest Rs 2.5 lakh crore and then the production capacity will be 110 million tonnes,’’ he informed.
— UNI

Ludhiana, September 4
The PSEB decision to shut down arc and furnace units in the wake of the ongoing power crisis has sent shock waves in almost 10,000 industrial units.

The decision affects not only more than 150 arc and furnace units but also industry like cycle and cycle parts manufacturers, auto ancillary units and other engineering goods manufacturing units that get raw material from this industry.

Failing to tackle the power crisis, the PSEB decided to shut down these (high power consuming) units till further orders. So much was the panic over the decision late last evening that the price of ingot jumped from Rs 21,500 per tonne to Rs 22,500 per tonne within an hour.

“We are shocked. We had already been suffering due to the ongoing power crisis, but we did not have the slightest of idea that the electricity board could take such a decision,” said Mr K.K.Garg, president, Induction Furnace Association of North India.

The direct impact of the decision would have to be borne by arc and furnace units in Punjab, which record a daily production of 1,50,00 tonnes. Ingot is used in manufacturing rods, coils and by other industries as raw material. Since the industry was already suffering on account of a power crisis, the PSEB had ordered these units to operate on alternate days and later imposed a compulsory 48-hour weekly off. These units do not even have a buffer even for a few days.

“Arc and furnace units refused to supply us any material as soon as these learnt of the PSEB decision. We had absolutely no idea that the government could take such a drastic measure. The industry would close down,” rued Mr Rajinder Jindal, president, Engineering Exporters Association of India.

In terms of employment, the industry employs lakhs of labourers a majority of whom migrants from UP and Bihar. With the closure of a majority of the units in the state, the problem of unemployment would aggravate.

San Francisco (USA), September 4
A California-based company has produced a portable fuel cell, which requires just half-a-litre of alcohol per day, to power a laptop computer.

The cell, produced by UltraCell, delivers 45 watts of power.

The cell and methyl alcohol (also known as methanol) fuel together are half the weight of the currently used lithiu batteries. And unlike batteries, the fuel cells can be “recharged” without being plugged into the wall.

Companies such as Toshiba have come up with their own fuel cells for laptops. But most of these products run directly on methanol, giving them a relatively low power output for their weight.

UltraCell focussed instead on turning methanol into hydrogen inside the device, which lets them pump out twice as much power. The hydrogen fuel cell in the device is similar to others that are already on the market, with the added advantages of a better catalyst.

This helps to keep down production of carbon monoxide, a by-product that can clog fuel cells, according to company officials.

With a price tag in the tens of thousands of dollars, the US Army may be the only customer willing to pay for portable power just now. The company hopes the price will fall to hundreds of dollars as the technology improves.
— PTI

New Delhi, September 4
ITC is contemplating to open two “super luxury” hotels, one each in Chennai and Bangalore.

“We are working towards opening two seven-star luxury hotels in Bangalore and Chennai. The company is assessing a few sites for the projects,” ITC Chairman Y.C. Deveshwar said.

Parrying a question on investment plans for the upcoming projects, Mr Deveshwar said: “We are aiming at building world-class luxury hotels and will shell out whatever is required to build such comfort
zones.” — PTI

Jaipur, September 4
The Rajasthan Tourism Development Corporation (RTDC), which has been in the eye of a storm over its decision to outsource some services of the prestigious Palace on Wheels from the Taj Group, has dropped the idea, a senior official said today.

The RTDC Board of Directors, which met here last night, found the sole bidding as “non-profit making and against the interest of the corporation,” Managing Director Rakesh Saini said.

The bidder quoted a higher rate of weekly expenses which the board did not accept, Mr Saini said, adding RTDC used to bear Rs. 11,016 per week per passenger while Taj group’s bid crossed Rs 35,000 per week per passenger.

Mr Saini, however, said there was neither any pressure from the RTDC employees union, which had gone to court over the issue, nor due to High Court’s stay on outsourcing.

“RTDC just completed the bidding work and found it financially non-viable in the interest of the state government and employees,” he said.

Mr Saini also ruled out inviting fresh bids saying there was no reason now to revive outsourcing or invite fresh bids as the winter season was about to begin.
— PTI

Q. I am 60 per cent
handicapped and my annual income is Rs 1,28,219 and my GPF amount is
Rs 7,210 and my LIC is Rs 12,588. Please give me my complete tax
information and also tell me that according to u/s 80U, can I get a
rebate of Rs 50,000 as I am 60 per cent handicapped.

— Sukhminder Barhmi

A. Section
80U of the Income-tax Act, 1961, (The Act) provides for that in
computing the total income of an individual, being a resident, who, at
any time during the previous year, is certified by the medical
authority to be a person with disability, there shall be allowed a
deduction of a sum of Rs.50, 000. This section further provides that
in case an individual is a person with severe disability the deduction
allowable shall be Rs.75,000 instead of Rs.50,000.

This section defines
"disability" as per the meaning assign to it in Clause (i)
of Section 2 of the Persons with Disabilities (Equal Opportunities,
Protection of Rights and Full Participation) Act, 1995, and includes
autism, cerebral palsy, multiple disabilities referred to in Clauses
(a), (c) and (h) of Section 2 of the National Trust for welfare of
persons with Autism, Cerebral Palsy, Mental Retardation and Multiple
Disabilities Act, 1999 (44 of 1999). A person with disability means a
person referred to in Clause (t) of Section 2 of the aforesaid Act as
well as in Clause (j) of Section 2 of the National Trust for welfare
of persons with Autism, Cerebral Palsy, Multiple Retardation and
Multiple Disability Act, 1999.

The disability
includes blindness, low-vision, leprosy, hearing impairment etc. A
person with severe disability means a person with 80 per cent or more
or one or more disability, which have been mentioned in the relevant
Act referred herein above.

The facts indicated
by you in the query do not provide sufficient details with regard to
your disability and whether the same is covered within the prescribed
list. In case you are so covered, a deduction to the extent as the
case may be, would be allowable as a deduction against your total
income in terms of the aforesaid section of the Act.

EMI on loan

Q: I have taken a
loan from XYZ company – a personal loan at 8 per cent and am paying
EMI of Rs1,500, where Rs 1,200 is principal part and Rs 300 is the
interest part for the last few months. Now suddenly the company has
asked me to pay EMI of Rs.1,530 as Rs.1,200 is principal amount and
Rs.300 is the interest amount and Rs.30 is 10 per cent service tax on
interest part. This will make my EMI Rs1,530. If I pay this then the
total outcome will make my loan costly than 8 per cent. Kindly
suggest, whether the XYZ Co. is justifiable on charging this amount on
my loan at the end I am to pay extra for my loan.

— Sumit Narang

A.
XYZ Company is required to pay service tax on financial services
rendered to a client. It being a statutory levy, XYZ Company can pass
on this statutory levy to the client.

Tax on pension

Q. I took premature
retirement from Punjab Government service and I receive regular
pension from Punjab Government, which is directly deposited in my bank
account. At present, I am living outside India. The bank deducts
whatever tax is due on my pension each year. Do I really need to file
tax return each year and, if so, then please guide how should I do it?

— Narinder

A: According
to the new provisions of the Act, which have been made applicable
w.e.f. June 1, 1999, you are required to furnish the return of your
income if your total income exceeds the maximum amount chargeable to
tax in the prescribed form and verified in the prescribed manner and
setting forth such other particulars as may be prescribed.
Accordingly, even if the tax is being deducted at source and taxable
income is more than the maximum amount provided for in the Finance Act
2005, you will have to file the return of income under the provisions
of the Act.

Tax liability

Q. I am a bank
employee having PAN No. and filing the return of tax for the past many
years. Tax is being deducted by my employer from my salary. I was
allotted one residential plot in one of the urban estates of HUDA in
the year 1986. However, the possession of the same was not given to me
and so many others as the land was under litigation. In the year 1996,
an alternative plot was offered in one of the other sectors but at a
higher price than the price on which original plot was allotted. I
approached the court to direct HUDA to charge the same old rate. The
hon’ble State Commission Haryana by an order in the year 2001
directed HUDA authorities to give possession of the said plot with the
same old rate and also pay compensation on account of delay in giving
the possession in the form and interest @12 per cent p.a. on the
amount deposited after two years from the original date of allotment
of 1986. By that time entire cost amounting to Rs 60,000 had already
been paid to me. HUDA did not comply the orders of the court and
contempt application was filed. It was only in November 2003 that HUDA
offered the possession. Actual paper possession was given in December
2003 and interest Rs 34,000 as per the direction of the court was also
given. At the same time, HUDA demanded Rs 40,000 as enhancement to be
payable in half yearly instalments of Rs 8,000 plus interest @ 15%. I
have already paid 4 instalments of Rs 8,000 each with interest. Last
instalment along with the interest will fall due in November 2005. I,
nor my spouse (since expired) and my dependant children have never
owned any residential plot, flat or house in our name anywhere in
India. Total price of plot, including enhancement of Rs 40,000 comes
to Rs 1 lakh. The expected sale price is Rs 10 lakh. Now I want to
settle in Chandigarh and accordingly want to purchase one residential
plot, house or flat at Chandigarh; Mohali or Panchkula through sale of
the HUDA plot and rest by raising loan from the bank. It will cost Rs
20 lakh. Please clarify the following:-

i) Whether any tax
liability will arise on the profit on sale of the plot (10 lakh - 1
lakh) i.e. Rs 9 lakh. I understand that the profit will not be taxable
in case the entire sale proceeds are utilised towards the cost of new
house to be acquired and in case of purchase of plot if it is built
within 2 years, as the cost of the new house will be more than the
capital gain.

ii) Whether profit of
Rs 9 lakh will be treated as long-term or short-term capital gain and
what will be the treatment in both cases for the purpose of
computation of tax, if any.

iii) What treatment
will be given to Rs 34,000 received in 2003-04 as interest
compensation as per the court order. Can this amount be set off and
deducted from the cost of the plot allotted by HUDA at the time of
sale or otherwise. I understand that the amount of compensation
allowed by the court on account of delay in giving the possession will
not be taxable. Even, HUDA also insisted to adjust the compensation
with the enhancement but I opted otherwise.

iv) Which date will
be reckoned as date of acquisition of the plot allotted by HUDA viz.
date of original allotment i.e. February 1986, date of offer of
alternative plot i.e. September 1996, date of the court order
directing HUDA to give possession i.e. May 2001, date of offer of
possession by HUDA i.e. November 2003 or date of actual paper
possession i.e. December 2003 for the purpose of computation of
capital gain. I have been told by a consultant that in such cases the
date of the order of the court can be treated as date of
possession/acquisition.

— S.C. Jindal

A. The
answers to your queries are as under:

(a) In my opinion,
the date of possession of plot being December 2003, the profit of Rs 9
lakh likely to be earned on sale of plot would be taxable as a
short-term capital gain.

(b) The long-term
capital gain is taxable at a concessional rate of 20 per cent. The
short term capital gain is taxable at the normal slab rate applicable
to an assessee.

(c) The interest on compensation
received as a consequence of court order would be taxable as income
from other sources in the year of receipt.

Readers are welcome to send questions
for tax advice. These should be brief, to the point and not exceed
100-150 words. The letters should be sent to Tax Advice C/o The
Tribune, Sector 29, Chandigarh-160020 or emailed to:taxadvice@ tribunemail.com